How to calculate basic earnings per share

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Reference no: EM132438921

Question - Flour Ltd. provides the following information for 2015:

Net Income $560,000

Capital Structure:

a. Convertible 6% bonds. Each of the 300, $300,000 is convertible into 50 common shares for the next 10 years

b. Common shares, 200,000 shares issued and outstanding $2,000,000 during the entire year

c. Stock options outstanding to buy 16,000 common shares at $20 per share.

Other Information:

a. Bonds converted during 2015 None

b. Income tax rate 30%

c. Convertible debt was outstanding the entire year

d. Average market price per common share during 2015

e. Stock options were outstanding the entire year

f. Stock options exercised during 2015

Required -

a. How to calculate basic earnings per share for 2015.

b. How to calculate diluted earnings per share for 2015.

Reference no: EM132438921

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